Santoshdevi A.Jain, Surat V. The Income tax Officer,Ward-2(1), Surat

ITA 2235/AHD/2009

• Counselvise Citation: 223520514 RSA 2009
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 20-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K VOHRA
• Keywords: Deemed to accrue or arise in india
• Section: 271(1)(c); 2

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH . .. . . .. . , , , , !'# !'# !'# !'#, , , , $ $ $ $ %% % & %% % & %% % & %% % &, , , , ' ' ' ' ( # ( # ( # ( # BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND MUKUL KR. SHRAWAT, JUDICIAL MEMBER) ITA NO.2235/AHD/2009 [ASSTT. YEAR : 2005-2006] SANTOSHDEVI A. JAIN, PLOT NO.A-26/124, M.G. ROAD, UDHNA SURAT. PAN : AASPJ 8015 A /VS. ITO, WARD-2(1) SURAT. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) .& / 0 (/ ASSESSEE BY : NONE ' / 0 (/ REVENUE BY : SHRI R.K. VOHRA DATE OF HEARING : 15 TH SEPTEMBER, 2011 DATE OF PRONOUNCEMENT : 30 TH SEPTEMBER, 2011 (2 / O R D E R PER G.D. AGARWAL , VICE-PRESIDENT : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S)-II, SURAT DATED 19.5.2009 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE IS AGAINST THE IMPOSITION OF PENALTY LEVIED UNDER SECTION 271(1)(C ) OF THE IT ACT ON THE ADDITION OF RS.71,000/- IN RESPECT OF NOTIONAL INCO ME UNDER SECTION 23 OF THE ACT. 3. WE HAVE HEARD THE LEARNED DR AND PERUSED THE MAT ERIAL PLACED BEFORE US. THE BRIEF FACTS OF THE CASE ARE THAT THE AO LE VIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE ADDITION MADE IN RESPEC T OF HOUSE PROPERTY ON THE GROUND THAT THE ASSESSEE HAS FAILED TO DISCLOSE NOT IONAL INCOME TOWARDS THE ITA NO.2235/AHD/2009 -2- HOUSE PROPERTY OTHER THAN SELF-OCCUPIED AS PER THE DEEMING PROVISIONS OF THE ACT. THE IMPUGNED PENALTY WAS CONFIRMED BY THE CIT (A). IN THE ASSESSMENT AND PENALTY PROCEEDINGS IT WAS CONTENDED BY THE ASS ESSEE THAT THE DETAILS OF THE HOUSE PROPERTIES WERE FURNISHED BEFORE THE AO. HOWE VER, OTHER RESIDENTIAL PROPERTIES THAN SELF-OCCUPIED WERE OCCUPIED BY THE ASSESSEES EMPLOYEES AND THERE WAS NO INCOME GENERATED FROM THE RESIDENTIAL PROPERTIES AND THEREFORE ASSESSEE BONA FIDE BELIEVED THAT HE WAS NOT LIABLE TO OFFER ANY NOTIO NAL INCOME. HOWEVER, TO BUY PEACE AND TO AVOID PROLONGED LITIGA TION, THE ASSESSEE AGREED TO THE NOTIONAL RENT COMPUTED BY THE AO ON ALV BASIS AND NO APPEAL HAS BEEN PREFERRED. THEREFORE, NO PENALTY UNDER SECTION 271 (1)(C) IS ATTRACTED. THE CIT(A) CONFIRMED THE PENALTY HENCE, THIS APPEAL BY THE ASSESSEE. 4. THE LEARNED DR RELIED UPON THE ORDERS OF THE AUT HORITIES BELOW AND SUBMITTED THAT LAW ON THIS ISSUE IS VERY CLEAR THAT EVEN FOR THE VACANT RESIDENTIAL HOUSE, DEEMED INCOME IS TO BE CALCULATED AS PER THE PROVISIONS OF SECTION 23 OF THE ACT. SINCE THE ASSESSEE FAILED TO OFFER THE DE EMED INCOME AS PER SECTION 23 OF THE ACT, THERE WAS CLEAR CSE OF CONCEALMENT OF I NCOME. 5. HAVING HEARD THE LEARNED DR AND CONSIDERED THE M ATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ISSUE OF LEVY OF PENALTY U NDER SECTION 271(1)(C) IS CONSIDERED BY THE HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS P. LTD. 322 ITR 158 WHEREIN THEIR LOR DSHIPS HELD AS UNDER: A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD 'PARTICULARS ' USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY O F FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSE SSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIO N, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGI NATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE ITA NO.2235/AHD/2009 -3- PARTICULARS. (EMPHASIS ADDED) THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY TH E ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULAR S ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRAC T PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE , NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOU S OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 2 71(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REG ARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RE TURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS . (EMPHASIS ADDED) THE RATIO OF THE ABOVE DECISION WOULD BE SQUARELY A PPLICABLE IN THE CASE OF THE ASSESSEE. IN THE CASE UNDER APPEAL BEFORE US, THE PENALTY UNDER SECTION 271(1)(C) IS LEVIED MERELY BECAUSE THE ASSESSEES C LAIM IS BASED INCORRECT APPRECIATION OF THE LAW WHICH IS NOT ACCEPTED BY TH E AO. HOWEVER, IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE FURNISHED ANY INACCURATE OR ERRONEOUS INFORMATION WITH REGARD TO HIS PROPERTIES. IN FACT THE ASSESSEE HAS STATED BEFORE THE AO THAT THE PROPERTY IN QUESTION WAS GIVEN TO I TS EMPLOYEES AND NO RENTAL INCOME WAS RECEIVED THEREFROM. THIS CONTENTION OF T HE ASSESSEE WAS NOT ACCEPTED BY THE AO AND THE AO WENT ON TO WORK OUT T HE RENTAL INCOME ON THE BASIS OF ALV. IT IS NOT IN DISPUTE THAT NO RENT WAS ACTUALLY RECEIVED BY THE ASSESSEE. ASSESSMENT OF RENTAL INCOME WAS MADE ON NOTIONAL BASIS. THE DETAILS OF THE HOUSE-HOLD PROPERTIES OTHER THAN SELF-OCCUPI ED PROPERTIES WERE FURNISHED BEFORE THE AO. THESE FACTS WERE NOT DISPUTED BY THE AO. THEREFORE, THE CLAIM OF THE ASSESSEE CANNOT SAID TO BE INACCURATE OR ERR ONEOUS TO ATTRACT THE RIGOR OF THE PROVISIONS OF SECTION 271(1)(C). THE HONBLE A PEX COURT HAS CLEARLY HELD THAT A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAI NABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REG ARDING THE INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE, IN OUR OPINION, T HIS DECISION OF THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PV T. LTD. (SUPRA) WOULD BE ITA NO.2235/AHD/2009 -4- SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. WE THEREFORE RESPECTFULLY FOLLOWING THE SAME CANCEL THE PENALTY LEVIED UNDER SECTION 271(1)(C). 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT THE DATE MENTIONED O N THE FIRST PAGE OF THIS ORDER. SD/- SD/- ( %% % & %% % & %% % & %% % & /MUKUL KR. SHRAWAT ) ' ' ' ' /JUDICIAL MEMBER ( . .. . . .. . G.D. AGARWAL) !'# !'# !'# !'# /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD